The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is set to meet on October 1, and all eyes are on whether the central bank will keep the repo rate at 5.50% or announce a small 25 basis point (bps) cut. A recent poll suggests the RBI might hold rates steady, but some industry leaders are hoping for a more growth-friendly approach to boost the economy.

Key Highlights

• RBI MPC October 2025: Will repo rate stay at 5.50% or see a cut?
• Industry leaders split on rate cut as RBI balances growth and inflation

Rohit Garg, Co-Founder and CEO of Olyv, highlighted the tough choice the RBI faces. “While retail inflation has eased, supported by GST rationalization and stable commodity prices, global volatility and domestic growth pace keep the outlook finely balanced,” Garg said. He believes a 25 bps cut could lower borrowing costs, making loans more affordable and keeping demand strong in sectors like retail and small businesses. Even if the RBI maintains the status quo, Garg thinks it would still offer enough stability for fintechs and non-banking financial companies (NBFCs) to plan their funding, innovate products, and expand lending.

Pramod Kathuria, Founder and CEO of Easiloan, is optimistic about a rate cut. “With inflation below 2% and GST reforms reducing retail prices, the RBI has an opportunity to reinforce economic momentum,” Kathuria said. He feels a modest 25 bps cut would support consumer borrowing, especially during the festive season, while keeping the financial system stable.

According to the poll, the RBI may take comfort in India’s strong Q1 FY26 GDP growth, which beat the central bank’s 6.5% forecast, while also considering the impact of GST reforms. Some experts, like A Balasubramaniam from ABSL AMC, suggest the RBI might signal a more supportive stance to encourage growth during the festive period.

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The RBI’s forward guidance will be just as important as its rate decision. As Garg noted, clear direction on growth and inflation could help traditional and fintech lenders create customer-focused products and improve financial access, especially when credit demand peaks during and after the festive season. With global challenges and domestic growth in focus, the MPC’s next steps will shape India’s economic path forward.